An increase in the real money supply will have its maximum effect on the equilibrium level of GDP when the
A) LM curve is vertical.
B) LM curve is horizontal.
C) IS curve is vertical.
D) IS curve is negatively sloped.
A
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Open market operations refer to the purchase or sale of ________ by the Federal Reserve in order to influence the money supply
A) U.S. government bonds B) corporate bonds and stocks C) foreign currency D) commodities
Skeeter's Skeeball Castle has seen its business slow down ever since Kerrie's Off-Key Karaoke opened up next door. Since the opening of Kerrie's Off-Key Karaoke, the opportunity cost of playing skeeball at Skeeter's has
A) decreased. B) not changed. C) fallen to zero. D) increased.
If the financial innovations such as ATM machines make money demand less elastic than it was before, then
a. the LM curve will become steeper. b. the LM curve will become flatter. c. both the IS and LM curves will become flatter. d. the LM curve will shift to the left.
Cartel members have an incentive to cheat on the cartel because:
A. the industry profit would be higher under competitive conditions. B. the cartel price is the competitive price. C. each member's output quota is too high. D. each member's MR is not equal to the cartel's MC.